Ex-worker says CTA cut his job because he blew whistle on budget

Casey Loop was an Iraq war veteran intent on public sector work when he landed his first full-time job out of graduate business school crunching budget figures at the Chicago Transit Authority.

But in less than 1½ years, after a raise and then a promotion, Loop says he was warning CTA officials about huge red flags in the numbers he was analyzing.

In a whistleblower lawsuit filed this week, Loop alleged that his job was axed after he finally urged the CTA’s financial overseer — the Regional Transit Authority — to investigate a “financial crisis” involving a $56 million labor “understatement” and other “astonishing” assumptions packed into the CTA’s 2013 budget.

Within 15 minutes of “confidentially” telling the CTA’s auditor that he had contacted the RTA, the CTA’s chief financial officer called and accused him of being “disingenuous,’’ the suit contends. Two days later, critical computer access was yanked, it charges. Within 1½ months, he was told he was being laid off.

“As soon as I sent that report [to the RTA], I was an outcast, and they looked for the first opportunity to get rid of me,’’ Loop, 33, told the Chicago Sun-Times.

“I took a lot of pride in being responsible for the public’s money. I took that money seriously, and I found certain members of the CTA were more interested in making it seem like they were doing a good job than being transparent. . . .

“The philosophy was to sweep problems under the rug. The verbiage they liked to use at the CTA was `kick the can down the road. We’ll deal with the problem tomorrow,’ meaning the next budget.’’

CTA spokeswoman Lambrini Lukidis said she could not comment on specifics of the suit, but said, “We believe the suit is completely without merit and the accusations are baseless. The CTA proposed a balanced budget for 2013 and finished the year with a balanced budget. Both the RTA Board and CTA Board approved the 2013 budget.’’

“Most of what was said — practically all of what was said — was not true,” said Ron DeNard, CTA chief financial officer. CTA auditor Andrell Holloway’s assistant referred calls to CTA media relations, and an RTA spokeswoman declined comment due to “pending litigation.’’

Loop’s suit contends the CTA “ignored his report of irregularities’’ that Loop considered “illegal if not highly unethical,’’ so Loop believed he had a duty to alert the RTA via a whistleblower complaint. He later also notified the state inspector general.

“He’s a guy who just really is looking to do the right thing,’’ said Loop’s attorney, Betty Tsamis. “He is re-employed. He’s not hanging out, trying to make money off this case.’’

The suit seeks reinstatement with back pay and unspecified damages. However, Tsamis said, once “made whole,’’ Loop hopes to use any proceeds to set up a scholarship fund for students interested in public sector work.

A native of San Diego, Loop said he came to Chicago after four years in the Army, including 15 months in Iraq, to get an MBA in finance and a master of finance in risk management from Loyola University, known for its business ethics training.

Eager to put his finance skills to work in the public sector, Loop landed his first full-time job out of grad school in February 2013 as a CTA budget project consultant. He oversaw numbers involving bus operations that composed nearly half of the CTA’s operating budget. By June 2013 he was promoted to manager of performance analysis, according to his suit.

Months into the 2013 budget year, Loop said, he discovered the CTA had plugged a 2013 budget hole by assuming that 347 budgeted vacancies would not be filled that year. On paper, this was buried as a $56 million labor credit in “Department 9000,” he said. Normally, Loop said, only 25 percent of vacancies would be projected as not filled.

“To say we are not going to fill a single position in 2013 is unrealistic,’’ Loop said.

In a letter to the RTA, Loop also called the budget’s revenue and ridership assumptions so “astonishing” that by July, they were $32 million off.

By then, the CTA’s finance team was creating a budget “reforecast’’ that Loop told the RTA was “favorably overstated and not implementable.’’

Among the ideas discussed was to recount inventory “we had lying around for bus and train repairs,’’ Loop said. “They did a recount and found over $9 million in parts just lying around. Did they really do this? I don’t know…. But it reduced the budget by $9 million.’’

Added Loop: “If you research inventory fraud, the biggest way you can manipulate your expenses is by finding more inventory than you had.’’

Loop said he also wondered about the safety implications of deciding to spend only $20 million of $30 million budgeted for equipment maintenance.

“You don’t just find $10 million in maintenance that doesn’t need to be done,’’ Loop said.

By August, the CTA was publicly conceding a $10 million deficit and blaming it mainly on overly optimistic fare and pass collection projections. However, CTA President Forrest Claypool vowed to fill the hole without fare hikes, service cuts or raiding capital funds.

In fact, Loop said, the CTA had been under pressure in crafting its 2013 budget because of a Claypool mandate to end the practice of using capital dollars to balance the operating budget.

Loop said he was promoted to find efficiencies and job cuts in bus, rail and maintenance for the 2014 budget while putting out “the same level of service to the public.’’ Ironically, on Sep. 11, 2013, he was told his job was among 149 being cut as of November.

“You don’t promote somebody in June just to lay them off in November,’’ Loop said. “To not see a correlation between my report to the RTA and my layoff is a pretty far reach.’’